The emergence of a new coronavirus variant has spooked financial markets around the Asia Pacific region.
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The NZX benchmark top-50 index at one stage was down more than 1.6 percent, before trimming its losses late in the day, to close down 1.3 percent, the biggest one-day fall since late March.
Most leading stocks including Fisher and Paykel Healthcare, Mainfreight, power companies Meridian and Mercury, Auckland Airport, and A2 Milk fell more than 2 percent.
The nervousness on the local sharemarket was mirrored around the region with sizeable falls in Australia, Hong Kong, and Tokyo.
"You shoot first and ask questions later when this sort of news erupts," said Ray Attrill, head of FX strategy at National Australia Bank in Sydney.
Scientists said the variant, detected in South Africa, may be able to evade immune responses and resist vaccines, causing hurried moves to reimpose travel restrictions on South Africa.
Investors ditched risky assets such as shares and headed for the safety of government bonds, and safe haven currencies such as the US dollar and Japanese yen.
The New Zealand and Australian dollars, which are sensitive to risk, also fell to three-month lows against the US dollar.
Analysts said fears of another global wave of infections was also feeding through into oil prices because of possible reduced demand.
- RNZ/Reuters
